Car Insurance: Importance, Types, Services, Instructions for Getting Policy
What are the different types of car insurance available, and how can you calculate and purchase car insurance online? Also, where can you check your vehicle information online?
Based on official statistics, there are over 44 million light vehicles registered, which are involved in approximately 200,000 road accidents every year. Car insurance not only covers economic losses but also protects the health and property of those affected by accidents.
1. What Is Car Insurance And Why Do You Need Car Insurance?
In our country, as well as in many other developed countries, car owners are required to have liability insurance which covers the repair or medical costs of anyone injured in a motor vehicle accident. It is illegal to drive without this policy and violations may result in fines or the loss of a driver’s license. However, personal expenses incurred by the driver who caused the accident are not covered by this required insurance. Another type of insurance is available on a voluntary basis to cover these expenses.
If the motorist purchases a temporary insurance policy, they are not responsible for the accident and may also be covered in case of car theft or other violent incidents. However, if the driver or vehicle owner is confident in their safety or does not want to spend more money, they have the option to purchase additional insurance to cover damages that are not covered by the required insurance.
There are two types of car insurance: Mandatory and Voluntary. While these types of insurance cannot prevent all possible events or protect the car from intruders, any knowledgeable car owner understands the importance of having both types of insurance.
Car insurance services can be categorized into the following tasks:
- Protection of property rights for private vehicles.
- Increased road safety.
- Faster resolution of conflicts that arise between accident participants.
- Reduced fear of threats to the health and safety of road users.
There are several types of car insurance policies available in the USA, but the most popular types of car insurance are:
- Liability insurance: This is the most common type of car insurance in the USA and it is required by law in almost every state. It covers the cost of damages you may cause to other people and their property in an accident for which you are at fault.
- Collision insurance: This type of insurance covers the cost of damages to your own vehicle caused by a collision with another vehicle or object, regardless of who is at fault in the accident.
- Comprehensive insurance: This type of insurance covers the cost of damages to your own vehicle caused by incidents other than collisions, such as theft, vandalism, or natural disasters.
- Personal injury protection (PIP) insurance: This type of insurance covers medical expenses and lost wages for you and your passengers in the event of an accident, regardless of who is at fault.
- Uninsured/underinsured motorist insurance: This type of insurance covers damages and injuries you may sustain in an accident caused by a driver who does not have enough insurance or no insurance at all.
Instructions For Getting A Car Insurance Policy:
Step1: Choosing an Insurance Company
The importance of this step lies in the reliability of the insurance partner and determines the speed and quality of payment in case of an insured event.
Trustworthy insurance companies that fulfill their obligations will never decrease the insurance premium amount and will do everything to consider the customer’s preferences. However, suspicious companies may find various excuses to refuse or reduce payments.
To choose an insurer, consider the following criteria:
- Financial stability
- Premium rates
- Coverage network
- Independent audits by statistical offices
- Before signing an insurance contract, verify the validity of the license to provide insurance services.
Step 2: Calculating the Cost of Car Insurance
To avoid mistakes in calculating the cost of your policy, it is recommended to use special services and insurance calculators available on the websites of insurance companies. There are many online services and calculators that allow you to not only calculate the relative cost of insurance and compare offers from multiple companies at once but also purchase car insurance online (although the cost of the policy from intermediaries may differ from the payment made directly to the company).
To use these services, follow these steps:
- Choose the type of insurance you need.
- Select the companies you want to compare.
- Determine the most appropriate option for your needs.
- Purchase your policy online and request home delivery.
Step 3: Providing the Required Documents
To obtain car insurance, a general list of documents is typically required, including:
- Information about the vehicle
- Driver’s license
- Vehicle registration certificate
- Certificate of conformity
- ID card
- Power of attorney (if the policyholder is not the owner of the vehicle)
- Using the PCA file ensures that errors are avoided during the calculation of insurance premiums.
Step 4: Filling out an Application and Signing a Contract
Before signing the contract, make sure to carefully review all the details to avoid any future issues.
Step 5: Paying for the Insurance Policy
You can pay for the insurance policy via bank transfer when registering on the insurance company’s website. If registering through a sales office, you can pay in cash. Make sure to obtain and keep a document confirming the authenticity of the payment, such as a receipt.
Step 6: Receiving the Insurance Policy
Physical policies are made professionally and are well-protected against fraud. Electronic policies must also be included in the PCA database.
5 Factors That Affect the Cost of Car Insurance Policy
To determine the cost of a car insurance policy, it’s important to understand that it’s affected by the coverage level, meaning the number of events that are covered. The more coverage, the more expensive the policy will be.
The cost of insurance can also be influenced by the owner’s place of residence and the value of their car. In large cities, where the risk of accidents is higher, insurance tends to be more expensive, while having a partial registration can help save money.
Other factors such as the owner’s age and driving experience, as well as the technical characteristics of the car, can also have a direct impact on the cost of the insurance policy.
It is necessary to examine those subjects in detail.
1. Manufacturing and Model of the Car
The cost of insurance is influenced by the difference in the cost of repairs and the popularity among car thieves. The size and power of the car’s engine are also important factors in determining the cost of insurance. Based on the amount of horsepower, a coefficient is determined to affect the price, which can range from 0.6 (for small cars) to 1.6 (for high-powered cars).
2. Anti-Theft System
The reliability of the anti-theft system is determined based on comparison methods. Insurance companies keep data on the number of thefts and create special lists of anti-theft protection systems that can greatly reduce the fear of car theft, and therefore the cost of the insurance policy.
3. Age of the Vehicle
The cost of insurance increases as the car ages, as this increases the fear of malfunctions and accidents. However, the age of the car also carries many indicators such as the market price of the car and its current technical condition. Insurance companies do not usually cover cars over 8-10 years old.
4. Market Value of the Car:
When getting insurance for a new car, its value is determined based on the price listed in the purchase and sale agreement. Then, the price is estimated based on the current market conditions and the type of vehicle. It may be tempting for the policyholder to show the minimum price in order to save on insurance costs, but it’s important to keep in mind that ignoring this indicator may result in not receiving enough insurance coverage in case of an accident.
5. Driving Experience of the Insured:
The driving experience is directly related to the risk of getting into an accident. Experienced drivers are less likely to have accidents than new drivers, and therefore pay less for insurance. Additionally, insurance companies take into account the number of past mistakes and accidents. Drivers who have gone without an accident for a year will receive a discount of 5% on their next insurance policy.